MAHABIR PRASHAD SHARMA Vs. COLLECTOR REWARI AT NARNAUL

JUDGEMENT

(1.) The petitioners claiming themselves to be workmen employed with M/s. Surendra Enterprises Pvt. Ltd., Rewari have challenged the action of the Haryana State Industrial Development Corporation Ltd., Chandigarh taken under S 29 of the State Financial Corporations Act, 1951 against M/s. Surendra Enterprises Pvt. Ltd. in this petition under Arts. 226/227 of the Constitution of India.

(2.) M/s. Surendra Enterprises Pvt. Ltd., Delhi Road, Rewari (for short, the Company) was set up to manufacture products of Copper, Brass and Zink, Industrial sheets and circles and L. P. G. Cylinders, etc. The Haryana State Industrial Development Corporation Ltd., Chandigarh (hereinafter to be referred to as the Development Corporation) and the Haryana Financial Corporation, Chandigarh (hereinafter to be referred to as the Financial Corporation) advanced loans to the Company in the year 1982 / 1986 amounting to approximately Rs. 58.90 lacs. The Company did not pay the instalments of the loans as stipulated in the agreements. A sum of Rs. 64.80 lacs was outstanding against the Company. As the amount was not paid, proceedings under S. 29 of the State Financial Corporations Act, 1951 (for short, the Act) were initiated against the Company and after following the procedure prescribed, the Development Corporation and the Financial Corporation took possession of the factory premises of the Company on 8/03/1990. The Company, on learning that the possession will be taken of the factory premises, filed a civil suit against the Development Corporation and the Financial Corporation for restraining them from taking possession. Along with the suit, an application under O. 39, Rr. 1 and 2. Civil Procedure Code, was also filed. The Subordinate Judge granted ex parte interim stay, The Development Corporation contested the application and the ex parte interim stay order was vacated. The Company's appeal against the vacation of the interim stay order was dismissed by the District Judge vide order dated 1/02/1990. The Company contested the claim of the Development Corporation and the Financial Corporation on the same pleas as have been enfolded in the writ petition.

(3.) The Financial Corporations have two independent remedies provided under Ss. 29 and 31 of the Act. Section 31 of the Act itself says that action can be taken under that section without prejudice to the provisions of S. 29 of the Act. The application of the provisions of S. 29 is restricted to only those cases where an industrial concern has incurred a liability under an agreement and to no other. Indisputably, the loan amount and interest accrued thereon is being recovered by the Development Corporation and the Financial Corporation in compliance with the mortgage deeds executed by the Company in terms of the provisions of the Act. Section 29 of the Act entitles the Financial Corporation to take possession of the debtor's property without adjudication by any judicial authority.